A common approach to maintaining mainframe or legacy systems has been, “If something isn’t broken, don’t fix it.” Although this may have been an acceptable approach in the past, enabling enterprises to avoid the challenges and risks of modernizing their systems, it definitely isn’t wise today with ever-evolving technological advancements and the business benefits that come with them. If business and IT leaders consider modernizing legacy systems to be a big risk, they should be aware of the even bigger risks of not modernizing them that will have an inevitable impact on their business.
Mainframes remain an important asset
A significant number of Fortune 100 companies have mainframes, yet a strong ambition is growing among IT and business decision-makers to harness the value of cloud.
According to a recent study, 67 of the Fortune 100, 45 of the top 50 banks, 8 of the top 10 insurers, 8 of the top 10 telcos, 7 of the top 10 retailers, and 4 of the top 5 airlines use mainframes to run business-critical applications and operations. Despite their widespread use, these business-critical, mainframe-based applications and platforms lead to several challenges, such as a high total cost of operations (TCO) and a lack of agility. These pose clear impediments to rapid business growth, especially when compared to what a typical cloud-native application offers, allowing enterprises to achieve their digital transformation objectives of innovation and agility while ensuring existing business process and practices aren’t lost or disrupted. With an awareness of cloud-driven benefits, most business and IT leaders can develop clear strategies for modernizing their legacy mainframes to become cloud-native applications and unlock the value of cloud to deliver transformative outcomes.
Planning for the “day after”
Modernization projects often fail to live up to the hype due to a lack of strategic planning. According to the 2021 Mainframe Modernization Business Barometer Report, 77% of respondents to the survey said they started but failed to complete at least one modernization program, and a lack of adequate planning was cited as the primary reason for those failures. Thus, modernization programs have a high probability of failing to deliver the outcome within schedule, without effort overruns, and with a positive return on investment (ROI).
One of the main reasons for such a high degree of failure is not planning for the “day after.” In most cases, modernization solution owners only think about application code, databases, and data, but they don’t plan for the entire platform ecosystem, including the interfaces, target operations, nonfunctional requirements (NFRs), architecture and, most importantly, the loss of knowledge. These oversights are a major risk to modernization initiatives, irrespective of which solution customers are trying to implement. Even simple lift-and-shift or rehosting projects are not trivial.
These overseen areas often are encountered in testing or worst-case analysis during production parallel, resulting in delayed go-lives and in some cases “no-go” situations, impacting brand value, causing revenue loss or major rework and, in most cases, forcing the enterprise back to the drawing board.
First step: De-risking a holistic strategy
The key to a successful modernization is to plan for the day after scenario right from the inception of the program itself. This planning should entail a series of vital steps:
- Determining the requirements
- Creating the relevant architecture
- Carefully navigating through the design phases, irrespective of the solution (such as automated migration or rehosting, rewriting, rearchitecting or reengineering, and replacing)
- Determining appropriate automation and deployment strategies
- Assembling the right talent and choosing the governance framework
Such planning should not only cover the code, data, and infrastructure, but should also include intangible assets, such as tech knowledge or standard operating procedures (SOPs) to effectively manage and maintain the modernized application/system. Doing so will uncover all the risks that can derail a modernization program.
Let us look at the insurance sector as an example. An insurance provider can assess its existing systems, developed through years of investments to get its rating and regulatory compliance correct. The enterprise’s modernization will then focus on three essential steps:
1. Migrating their systems to a new cloud platform
2. Refactoring the monolith system by rearchitecting it into a macro/micro services-based architecture focused on specific components (for example, modularizing the following individual components as “engines” or services):
b. Regulatory compliance
c. Policy issuance
3. Leveraging these components/engines to bring new insurance products and distribution options to market more quickly and efficiently, based on greater levels of agility, while delivering better customer experiences
At Wipro, we focus on a holistic risk management approach that covers the full range of business, IT, process, employee, operational, and financial risks, as shown below.